The Effects of Housing Price Declines on Children's Educational Outcomes

Vicki Been (), Ingrid Ellen (), David Figlio (), Ashlyn Aiko Nelson (), Stephen L. Ross (), Amy Ellen Schwartz () and Leanna Stiefel ()
Additional contact information
Vicki Been: School of Law New York University New York, NY 10012
Ingrid Ellen: Wagner Graduate School of Public Service New York University New York, NY 10013
David Figlio: Department of Economics University of Rochester Rochester, NY 14611, National Bureau of Economic Research IZA Institute of Labor Economics
Ashlyn Aiko Nelson: Paul H. O'Neill School of Public and Environmental Affairs Indiana University Bloomington, IN 47405
Stephen L. Ross: Department of Economics University of Connecticut Storrs Mansfield, CT 06269 National Bureau of Economic Research
Amy Ellen Schwartz: Biden School of Public Policy and Administration University of Delaware Newark DE 19716
Leanna Stiefel: Wagner Graduate School of Public Service New York University New York, NY 1003

Education Finance and Policy, 2025, vol. 20, issue 2, 312-343

Abstract: We examine the effects that household exposure to housing price declines, captured by measures of negative equity, have on children's academic performance, using data on public school students and housing transactions from the State of Florida. Our empirical strategy exploits variation over time in the timing of family moves to account for household sorting into neighborhoods and schools and selection into initial mortgage terms. In contrast to the existing literature on the effects of foreclosure, we find that students with the highest risk of negative equity exhibit significantly higher test score growth, with the largest effects among Black students and students qualifying for free or reduced-priced lunch. We find evidence supporting two underlying mechanisms: (1) families in negative equity may reduce the impact of income losses on consumption by forgoing mortgage payments, and (2) families exposed to high levels of negative equity may move to schools that received higher average school report card grades. While negative equity and foreclosure are undesirable, negative equity may have encouraged homeowners to forgo mortgage payments to mitigate the impact of the Great Recession, and temporarily reduced the housing market barriers low-income households faced in accessing educational opportunities.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1162/edfp_a_00431

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:edfpol:v:20:y:2025:i:2:p:312-343

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=1557-3060

Access Statistics for this article

Education Finance and Policy is currently edited by Stephanie Riegg Cellini and Randall Reback

More articles in Education Finance and Policy from MIT Press
Bibliographic data for series maintained by The MIT Press ().